Following Modi's sleight of hand in his New Year's Eve address when the Prime Minister just evaded the question of demonetization to pull another rabbit out of his hat - insulating politics from black money - Arun Jaitley too in his budget speech virtually by-passed the single most significant economic event of 2016 - demonetization - and sought to distract attention from that gigantic flop with his proposals on promoting transparency in political funding. Had the proposals not been as half-baked as they were, perhaps a more detailed dissection of these proposals might have been called for. But, as the proposals amounted to "hogwash", as Sitaram Yechury described them, perhaps it would be more apposite to avail of this occasion to reflect on the whole question of the nexus between politics and money.
There is no doubt that politics requires money. By and large, politicians are not businessmen and politics is not an economic activity. Therefore, funding for politics has to come from those with the wherewithal. This leads to the simplistic equation of political funding with economic corruption. The fact is that political funding amounts to a tiny proportion of illegal business earnings. Businessmen don't earn in black to pay politicians. Their primary purpose is to enrich themselves and their businesses. What gets shared with the political class is peanuts. This is evident from estimates made by the reputed Washington-based think-tank, Global Financial Integrity, of the black money outflow from India. It shows that every year, around $68 billion illegally leaves our shores, that is, in the five-year period between elections some $330 billion finds its way out of the country. Even the most outlandish estimates of political expenditure to keep our democracy going constitute but a small fraction of this dark outflow, and an even smaller fraction of the total earnings - declared and undeclared - of what big business generates very year. Businessmen make money not for donating to political parties, but for themselves and their businesses. What politics receives is small change.
The other part of the story is to enquire what role money plays in determining electoral outcomes. Over close to 70 years of democracy, we have discovered that anti-incumbency, rather then pro-incumbency, is the primary characteristic of our politics. As ruling parties are typically rather better-off than those in opposition, if money were the determining factor, the general outcome would be for ruling parties to be re-elected. In fact, however, elections and the electorate are clearly more complex than spending power equaling winning chances. This also perhaps explains why most business houses play both sides, not only putting some money on the incumbent, but also keeping the opposite party or parties in the financial loop in the expectation that, more often than not, no one, not even professional pollsters, can really predict who will win and who will bite the dust. Like good betting men, they spread their risks around.
So, what, if anything, will transparency in political funding achieve? In the unlikely event of a formula being found to openly establish the relationship between individual businessmen and business houses with political parties, the impact will prove as illusory as the Election Commission's move, about 15 years ago, to oblige candidates to file affidavits displaying their wealth and those of their close relatives, as well as the record of their arraignment for crimes, for public scrutiny. Has any of this led to any diminution in the political participation of men and women of means, or of those with crimes - sometimes heinous, occasionally blood-curdling - alleged against them? And have any of them lost their elections only on account of their frank confessions in affidavits? No, not at all. Even the Vijay Mallyas find themselves getting elected. And although the personal assets of some of our most prominent politicians - such as the Finance Minister himself - might make you gasp, the fact that Arun Jaitley can afford a second egg for breakfast merely shows that he was an extremely successful lawyer with nothing at all of a doubtful nature about his assets. There are, of course, others whose revelations raise eyebrows. But in all these years, to the best of my knowledge, there has not been one conviction for assets declared in the affidavit being disproportionate to known sources of income, or even known sources of income being disproportionately larger than assets declared. The affidavits serve no practical purpose at all - other than providing the media with steamy gossip for a day or two immediately after candidatures are formally filed.
More to the point, the affidavits have little or no bearing on election outcomes. Being rich or poor - or, indeed, having grown suddenly rich - seems not to affect election prospects one whit. The rich sometimes win; more often, they lose (which is possibly one reason so few of the really richie rich enter the election fray, particularly for the Lok Sabha). The poor occasionally emerge victorious (a relatively impecunious Ram Vilas Paswan holds the Guinness record for his margin of victory at a time when he was not much above the bread line!) but that does not establish any connection definitively between poverty and electoral prospects. Indeed, not even a "criminal record" dims electoral prospects for so many with such records who get into our legislatures. A convicted criminal cannot, of course, even stand, but a candidate against whom an FIR (or several), or even multiple charge-sheets have been filed, cannot be disqualified. And many actually get elected. The electorate seems to believe that if a candidate cannot help himself and his family to bounty, how are they to be relied on to deliver to their constituents?
In sum, all that has been achieved by these much tom-tommed disclosures is salacious headlines for a day or two, followed by electoral indifference to the scandals allegedly unearthed through affidavits solemnly sworn before the Election Commission's Returning Officers. Such will be the fate of so-called "transparency provisions" in linking donors to recipients, especially of the anonymous kind envisaged by Arun Jaitley and his idea of RBI-issued "electoral bonds", where no one will know who had donated how much and which beneficiary party has pocked what part of the pickings.
Indeed, even if we were to seek transparency by, for example, the public funding of elections, that level playing field will only raise the bar on actual election expenditure, as parties and donors will rival each other in attempting to raise further contributions over and above what they secure from public sources. We see this in the US, where mind-boggling sums are raised quite transparently and spent quite openly on elections at all levels from Sheriff to President. Indeed, public funding in that country is actually linked to what is raised privately and so declared by candidates. It is no secret that corporate donations are linked to promises of policy changes that will benefit particular corporate interests. Trump has gone further and set up a cabinet of plutocrats.
I suspect much the same will happen here, whatever the mechanism for disclosures of who gave what to whom and how much. There will be an initial frisson of excitement when transparency measures are legislated, but the impact of such disclosures on the political outcome will be minimal. It would amount to no more than a grand but futile gesture.
(Mani Shankar Aiyar is former Congress MP, Lok Sabha and Rajya Sabha.)
Disclaimer: The opinions expressed within this article are the personal opinions of the author. The facts and opinions appearing in the article do not reflect the views of NDTV and NDTV does not assume any responsibility or liability for the same.
The other part of the story is to enquire what role money plays in determining electoral outcomes. Over close to 70 years of democracy, we have discovered that anti-incumbency, rather then pro-incumbency, is the primary characteristic of our politics. As ruling parties are typically rather better-off than those in opposition, if money were the determining factor, the general outcome would be for ruling parties to be re-elected. In fact, however, elections and the electorate are clearly more complex than spending power equaling winning chances. This also perhaps explains why most business houses play both sides, not only putting some money on the incumbent, but also keeping the opposite party or parties in the financial loop in the expectation that, more often than not, no one, not even professional pollsters, can really predict who will win and who will bite the dust. Like good betting men, they spread their risks around.
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More to the point, the affidavits have little or no bearing on election outcomes. Being rich or poor - or, indeed, having grown suddenly rich - seems not to affect election prospects one whit. The rich sometimes win; more often, they lose (which is possibly one reason so few of the really richie rich enter the election fray, particularly for the Lok Sabha). The poor occasionally emerge victorious (a relatively impecunious Ram Vilas Paswan holds the Guinness record for his margin of victory at a time when he was not much above the bread line!) but that does not establish any connection definitively between poverty and electoral prospects. Indeed, not even a "criminal record" dims electoral prospects for so many with such records who get into our legislatures. A convicted criminal cannot, of course, even stand, but a candidate against whom an FIR (or several), or even multiple charge-sheets have been filed, cannot be disqualified. And many actually get elected. The electorate seems to believe that if a candidate cannot help himself and his family to bounty, how are they to be relied on to deliver to their constituents?
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Indeed, even if we were to seek transparency by, for example, the public funding of elections, that level playing field will only raise the bar on actual election expenditure, as parties and donors will rival each other in attempting to raise further contributions over and above what they secure from public sources. We see this in the US, where mind-boggling sums are raised quite transparently and spent quite openly on elections at all levels from Sheriff to President. Indeed, public funding in that country is actually linked to what is raised privately and so declared by candidates. It is no secret that corporate donations are linked to promises of policy changes that will benefit particular corporate interests. Trump has gone further and set up a cabinet of plutocrats.
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(Mani Shankar Aiyar is former Congress MP, Lok Sabha and Rajya Sabha.)
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